Lenders should pay extra
published: Sunday | February 29, 2004
THE EDITOR, Sir:
SHOULDN'T IT be mandatory that developers, building societies, banks and other mortgagors pay interest to clients for monies deposited on houses and buildings under construction? Monies may be tied up in excess of one year due to missed delivery dates.
Mortgagees are called upon to provide working capital for developers in the form of deposits but get no compensation when delivery dates are missed.
The developers are free to add escalation charges, which may be as much as 20 per cent of the price of the house or building. If this money is not paid when demanded the mortgagee is subjected to pay interest for late payment. I believe the relevant Government ministry or department should look into this matter with view to protecting the mortgagee.
